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Swiss hedge fund managers are considering relocating to neighboring Liechtenstein to sidestep tougher regulations being introduced in Switzerland and gain access to the European Union

According to PricewaterhouseCoopers LLP, about 47 percent of the 92 firms surveyed, including managers of hedge funds, private equity and real estate, would pick EU member Liechtenstein over being supervised by the Bern- based Swiss Financial Market Supervisory Authority. The move would allow them earlier access to EU markets under a new regulatory regime for alternative investment managers.

While the EU directive comes into force next year, more than 400 Swiss alternative investment firms may have to wait until at least 2015 before obtaining a "passport" to participate in the EU market. Firms with managers in Switzerland or offshore jurisdictions will get quicker access to the EU if they relocate them to Liechtenstein rather than operate from Switzerland, according to the report.

Almost three-quarters of firms surveyed said they selected Switzerland for proximity to family and friends, while only 39 percent cited corporate taxes as an advantage. In future, regulatory conditions and the practices of the supervisory authority will be the most important criteria, PwC said.

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